People Are Finally Waking Up To China's Massive Over-investment Problemhttp://www.businessinsider.com/the-imf-on-overinvestment-2012-12/comments
en-usWed, 31 Dec 1969 19:00:00 -0500Tue, 31 Mar 2015 18:20:42 -0400Michael Pettishttp://www.businessinsider.com/c/50e4dacbeab8eac610000011michaelnzWed, 02 Jan 2013 20:11:39 -0500http://www.businessinsider.com/c/50e4dacbeab8eac610000011
Why so many so called analysts/economists from the west have continued to make numerous forecasts predicting "China collapse" and continue to fail, and yet still have the thick skin to keep coming back with the same old?
Does the word "track record" means nothing for credibility nowadays?
Keep listen to guys like Gordon Chang or Michael Pettis, and you will continue to be clueless about China.
And yes, I am Chinese.
Best regards
mhttp://www.businessinsider.com/c/50e32fdf69bedd684e000009RalphJrTue, 01 Jan 2013 13:50:07 -0500http://www.businessinsider.com/c/50e32fdf69bedd684e000009
The workers have been getting 10% raises each year for around 20+ years so they are happy.http://www.businessinsider.com/c/50e243fb69bedd3924000013DudeMon, 31 Dec 2012 21:03:39 -0500http://www.businessinsider.com/c/50e243fb69bedd3924000013
Agree to a certain extent.
The only reason many lives have been better because of the investments from USA and other countries into China. In the 1950s to 1980s, people were starving like they were in certain parts of Africa. As Deng Xipeng used western idealology to move China into a less Communist country, China began to improve.
What most of you do not understand is that the government in China is trying to keep on investing while they take parts of the money and launder the dirty money into countries like the USA, Canada, Singapore, Swiss, Japan, Thailand, Malaysia, etc.http://www.businessinsider.com/c/50e1d17769beddec15000001James D. SmithMon, 31 Dec 2012 12:55:03 -0500http://www.businessinsider.com/c/50e1d17769beddec15000001
I've listened to the doomsayers predict China's downfall for decades. Hasn't happen has it? The capitalist system is absolutely dependant on wastful spending. The model couldn't exist without it. They build empty bricks and mortar projects. We build armaments that sit in the desert. It bothers people to admit to this truth but that's the way it is. When you can print your own money you have a lot of flexibility with waste.http://www.businessinsider.com/c/50e1840d6bb3f7c207000004Fire up a JMon, 31 Dec 2012 07:24:45 -0500http://www.businessinsider.com/c/50e1840d6bb3f7c207000004
I've been reading Prof. Pettis for over 2 years, and you seem to be a newcomer to his academic blogging, and may have read his writing above for the first time. Thanks for joining the conversation, Mr. Wrong! :-)
Your statement that "Chinese central bankers have got it right till now" is patently absurd. That's like saying, "they've lit the fuse and there's plenty of time to stomp on it before it gets to the bomb."
Furthermore, Professor Pettis IS helping out the US by pointing out the many dangers of investing there, so he is DIRECTLY helping the US through his intensive research and on the ground conversations, as well as having many student groups independently producing reports with his guidance. Notice how FDI has fallen off a cliff - NO ONE trusts the Chinese anymore!!!
Here's a link worth exploring:
<a href="http://www.taipeitimes.com/News/editorials/print/2012/12/26/2003551006" target="_blank" rel="nofollow" >http://www.taipeitimes.com/News/editorials/print/2012/12/26/2003551006</a>
Jhttp://www.businessinsider.com/c/50de7ced6bb3f77d4100000fWrong since 2002Sat, 29 Dec 2012 00:17:33 -0500http://www.businessinsider.com/c/50de7ced6bb3f77d4100000f
Ah! Michael Pettis is back with his incessant sniping at China (while living there). This man has been talking down China since forever. I wonder what his real agenda is. I am sure he will be right some day.
What most of us cannot fathom is the enormous population in China. You talk about overinvestment? If you want to see what would have happened without all this "overinvestment", then take a trip to India, another nation with billion plus people that is a land of misery because of the kind of incremental investment that it does.
Chinese central bankers have got it right till now. At worst, they are on par with two-bit academics like Pettis who should have helped out his home country, the US.http://www.businessinsider.com/c/50de6c17eab8ea2a2500001bNexus789Fri, 28 Dec 2012 23:05:43 -0500http://www.businessinsider.com/c/50de6c17eab8ea2a2500001b
Switching from an export led growth economy to one that is based on internal consumption will be a big challenge. It call could collapse before then even get anywhere near that.http://www.businessinsider.com/c/50de6b9c6bb3f79a29000026Nexus789Fri, 28 Dec 2012 23:03:40 -0500http://www.businessinsider.com/c/50de6b9c6bb3f79a29000026
It is all based on export led growth. That is okay while the suckers overseas continue to buy 'stuff' ' but it can quickly become a bit a train wreck once that goes into reverse. The other thing is that in China is that there is no 'safety net' so once factories start to close there would be millions without any means of support.http://www.businessinsider.com/c/50de031fecad045a7f00000bJerryFri, 28 Dec 2012 15:37:51 -0500http://www.businessinsider.com/c/50de031fecad045a7f00000b
tom, thanks for the info, at least i get the moral of the story now....but i still don't think i agree.
there's a lot of additional facts that would be needed to be know to be sure, but....
my perception of it is this, foreign companies can't own more 49% in china companies, so they clearly will not have to submit to control by foreigner ownership. they use foreign capital build these great modern factories and infrastructure, they have put a lot of people into employment at these factories, giving them an income where they may have had none before. they are building out modern national infrastructure by making idle workers productive and give income to workers. as mentioned in the article, some losses may be hidden, but they feel it's their business and we probably don't need to know the real story, sovereign prerogative i guess.
well, with a billion+ people to consume and modern infrastructure to facilitate use of all their modern factories, my assumption is they have bigger plans in the works than just continuing to produce for others cheaply. They will continue for a while as long as it suits their purpose. but lets face it, they seem to be on a mission in preparing for their future of self reliance and internal sustenance, at the fastest pace they can to get there regardless of short term burps. rgdshttp://www.businessinsider.com/c/50ddf7c969bedd4c4900005fdsesFri, 28 Dec 2012 14:49:29 -0500http://www.businessinsider.com/c/50ddf7c969bedd4c4900005f
No matter how much China "over-invest", it is still way better than wasting trillion of tax payer's money on useless wars.http://www.businessinsider.com/c/50dde5d5ecad045748000004Tom FioreFri, 28 Dec 2012 13:32:53 -0500http://www.businessinsider.com/c/50dde5d5ecad045748000004
The moral to the story is that they are spending on projects that they don't need, will never need and that will hurt their economy going forward. How many of the high speed train lines that they have built will pay for themselves in any way? They have empty cities, as well as empty high rise apartment buildings in the populated cities. They have plants that they won't open because if they did it would cause a crash in the price for the products produced. They have built a solar industry that produces several times market demand; those of you whining about Solindra should understand that China has pumped more than a dozen Solindras into that industry.
All of this over-investment has come at the expense of the individual citizens of China and the private economy. The thing is that the bill hasn't even come due yet; we have yet to see the crash to this massive bubble.
Never mind, just assume that some other government, one that is massively corrupt, knows how to run things while you are denigrating your own.http://www.businessinsider.com/c/50ddd2bd6bb3f7e909000009JerryFri, 28 Dec 2012 12:11:25 -0500http://www.businessinsider.com/c/50ddd2bd6bb3f7e909000009
Yeah, i didn't get the moral of the story. is it saying that things are too good in china? That they need to inflict austerity on their economy just because other nations might wise up to the fact that when you print money and use it for public purpose, instead of egregiously subsidizing the 1%, the people might enjoy some prosperity?http://www.businessinsider.com/c/50ddcd0f69beddee5f00000bBradfordFri, 28 Dec 2012 11:47:11 -0500http://www.businessinsider.com/c/50ddcd0f69beddee5f00000b
The picture is changing somewhat but Pettis is anchoring to his hypothesis. In the news today, the Chinese gov't said they would run a deficit 50% higher than last year.http://www.businessinsider.com/c/50ddbf2669bedd0d3900002bEd RectorFri, 28 Dec 2012 10:47:50 -0500http://www.businessinsider.com/c/50ddbf2669bedd0d3900002b
China's "unsustainable" growth and "overinvestment" has been going on for about 30 years now. Has there ever been a country that has had anything close to 8% - 12% annual economic growth rates for 3 decades?? Hundreds of millions of Chinese have been lifted out of poverty into the middle class as a result of this remarkable record of rising affluence.
Maybe the central planners in China know better how to manage an economy than does Michael Pettis.http://www.businessinsider.com/c/50ddb7c76bb3f7d955000010BenskyFri, 28 Dec 2012 10:16:23 -0500http://www.businessinsider.com/c/50ddb7c76bb3f7d955000010
Perhaps in the face of what demographics portends for the next 30-50 years .... but remember they are driven by what happened as a lack of underinvestment in the 80's 90's. Unfortunately most are driven by hindsight ... which is always 20/20. Foresight is a little trickier.http://www.businessinsider.com/c/50ddae8969beddee14000003Aqua BuddhaFri, 28 Dec 2012 09:36:57 -0500http://www.businessinsider.com/c/50ddae8969beddee14000003
Nothing to see here using Blodget logic just a government that is spending to keep the government afloat!